CVC, Bencis face ‘wheat cartel’ antitrust fine

Meneba Beheer, a Dutch flour business and former portfolio company of CVC and Bencis, has been charged by the Dutch regulator for price fixing. Both private equity firms face fines as a result.

The Dutch competition authority has charged Meneba Beheer, a local flour business, for breaking competition rules through price fixing and is now fining private equity firms CVC Capital Partners and Bencis Capital Partners because they owned controlling stakes during the period in question.

The Dutch regulator ruled that the two PE firms must pay between €450,000 and €1.5 million after Meneba Beheer was involved in a collective agreement with competitors to keep prices stable between 2001 and 2007, according to the Autoriteit Consument & Markt (ACM). Investment firms can be liable if businesses in which they have a controlling stake are breaking the competition rules, the Dutch regulator said in a statement, but it is the first time ACM has fined investment firms.“ACM is of the opinion that investment firms, too, can be held responsible for the behavior of the firms they own (through those funds), particularly if the investment firm in question has decisive influence. ACM has concluded that this was the case with the investment firms which have now been fined,” the statement read.The Dutch regulator’s case began in 2012 when it fined 14 businesses in the Netherlands, Germany and Belgium that were involved in this so-called ‘wheat cartel’. At the time, 11 producers appealed the decision. In August 2014, a court in Rotterdam ruled that seven of these producers – including Meneba Beheer – were indeed involved in price fixing activities.CVC and Bencis will be able to appeal the decision, although the exact time-frame for this is unclear. A spokesperson for ACM was not immediately available for comment. Bencis and CVC declined to comment.

Meneba develops, produces and markets raw materials and functional cereal-derived ingredients for bakery products, foodstuffs, animal feed and industrial applications.

CVC acquired the company in 1997 from Goodman Fielder, a listed Australian food company. In November 2004, CVC sold it to Bencis. The latter made the investment using capital from its Bencis Buyout Fund II on €250 million, a 2005-vintage vehicle, PEI reported at the time. Bencis sold the company to Nimbus Investments in July 2011, which rebranded the company to Unicorn Grain Specialties in 2012.

The case follows an April European Commission ruling which saw Goldman Sachs fined €37.3 million for participation by Prysmian, a Goldman Sachs Capital Partners (GSCP) portfolio company, in a global cartel. Goldman lodged an appeal of the Commission’s decision with the EU’s General Court in Luxembourg where it will look to argue that it was merely a financial investor and should not be treated as a parent company to Prysmian for the period of its ownership.

Reporting by Yolanda Bobeldijk